In May 2025, the annual inflation rate in South Africa remained unchanged at 2.8%, in line with analysts’ forecasts, according to data released on Wednesday, June 18 by the national statistics agency. This level, below the midpoint of the 3 to 6% target set by the South African Reserve Bank (SARB), has been observed since August 2024.
This disinflationary context has allowed the SARB to ease its monetary policy, with four interest rate cuts in its last five meetings. On May 29, the institution reduced its key rate by 25 basis points to 7.25%, while the prime rate dropped to 10.75%, in order to support a weakened economy and in light of more favorable inflation prospects.
In March, inflation had reached its lowest level since June 2020, at 2.7%. In the first quarter of 2025, the Consumer Price Index (CPI) rose by 3% on an annual basis, after 2.9% in the last quarter of 2024.
Core inflation (excluding food and energy) fell to 3.1% in March, down from 3.4% in February. In detail, goods inflation dropped to 2% on an annual basis (down from 2.5% in February), while services inflation moderated for the third consecutive month, to 3.5%, after 3.8% the previous month.
